NUMBERS of sales in the residential property market have fallen at their sharpest rate since the late 1980s - but sales in the Bournemouth area are holding firm.

Nationally the number of sales has fallen from 146,000 homes in August 2002 to 99,000 last month, says the Inland Revenue.

But Goadsby & Harding believes that this area's high levels of employment - combined with the fall in interest rates - are underpinning local confidence.

Goadsby & Harding residential dir-ector John Tofield said: "I think we are beneficially cocooned here.

"We are insulated from some of the pressures that have occurred elsewhere. Employment is not a problem and we are still a wealthy area."

Increases in property prices had offset falls in transaction numbers over the last year.

And "in the last couple of weeks there have been record numbers of sales at some of our offices," said Mr Tofield.

"Some of the new homes developers think our area is the bee's knees because it is outperforming other regions at the moment."

Lombard Street Research UK believes that part of the decline nationally "may be related to concerns regarding the war in Iraq".

While the 99,000 transactions figure for June may sound substantial, it is sharply lower than in any period since 1997, said Lombard Street Research spokesman Matthew Jackson.

"Such a rapid slide in housing market activity has been seen only once before - the crash in the late 1980s."

But although the housing market had weakened in 2003, a crash still seemed unlikely, he said.

Latest figures from the Council of mortgage Lenders show that only 30,000 first-time buyers entered the market in June, compared with 48,000 a year earlier.

First-time buyers accounted for only 29 per cent of all mortgage borrowers, compared with 44 per cent in June 2002.

But despite the fall in the number of transactions, the fundamentals of the market are very positive, investment experts believe.

"Property prices at the top end may be falling, but generally across the board, the larger dynamic for prop-erty is so high in the UK," said one local analyst.

"The longer-term dynamics remain quite attractive", simply because the supply of dwellings - around 140,000-150,000 per year was unlikely to meet demand, he added.